REPLY 


OP 


JOHN  W.  GARRETT, 

President  of  the  Baltimore  and  Ohio  R.  R.  Co. 


TO 


ILLIAM  H.  VANDERBILT, 

/-•  Central  and  IIwU<>n  River  R.  R.  Co. 

SEPTEMBER  30,  1881. 


REPLY 


OF 


JOHN  W.  GARRETT, 

President  of  the  Baltimore  and  Ohio  R,  R.  Go. 

U 

TO 

WILLIAM  H.  VANDERBILT, 

President  of  the  New  York  Central  and  Hudson  Rivzr  R.  R.  Co 


SEPTEMBER  30,  1881. 


Reply  of  JoJin  W.  Garrett,  President  of  the  Baltimore 
&  Ohio  R.  R.  Co.,  to  William  H.  Vanderbilt,  Presi- 
dent of  the  New  York  Central  &  Hudson  River 

R.  R.  Co. 

Baltimore,  September  30,  188 1. 

On  August  loth  last,  the  "  New  York  Tribune  "  published,  under 
the  head  of  "  Railroad  Interests — Mr.  Vanderbilt  on  rates — He  speaks 
his  mind  freely — The  position  of  the  Central — Matters  that  must  be 
settled  before  the  war  can  end  " — a  series  of  statements  made  by  Presi- 
dent Wm.  H.  Vanderbilt,  in  which  was  contained  a  most  gratuitous 
and  unjust  attack  upon  the  Balto.  &  Ohio  R.  R.  Co.  On  the  i2th 
of  August  President  Garrett  stated,  in  a  dispatch  published  by 
the  Associated  Press,  that  his  attention  had  been  called  to  this 
publication,  and,  as  several  days  had  elapsed  without  any  correction 
having  been  made,  he  assumed  that  President  Vanderbilt  accepted 
the  responsibility  of  having  made  the  statements  ;  that  those  in  refer- 
ence to  the  Baltimore  &  Ohio  Co.  were  absolutely  contrary  to  fact, 
and  that,  in  view  of  the  importance  of  the  subject,  he  would,  after  ob- 
taining the  necessary  statistics,  present  the  case  through  the  press  in 
a  manner  which  would  cause  the  public  to  understand  the  history  of 
.the  course  of  the  New  York  Central  Co. 

The  developments,  since  that  period,  of  the  policy  and  "  methods  "  of 
the  New  York  Central  &  Hudson  River  R.  R.  Co.,  and  of  the  roads 
controlled  by  President  Vanderbilt,  have  produced  such  grave  and 
needless  losses  to  the  railroad  interests  of  the  country,  and  such  de- 
rangements of  its  business  affairs,  that  the  requirement  is  absolute  for 
the  statements  now  submitted. 

The  last  meeting  of  the  Presidents  of  the  Trunk  Lines  was  held  at 
the  office  of  Commissioner  Fink,  in  New  York,  on  June  i6thand  iyth 
1 88 1.  After  some  hesitancy  and  delay  on  the  part  of  President 

M175603 


Vanderbilt,  a  resolution  was  finally  unanimously  adopted,  "  that  the 
three  gentlemen  composing  the  Board  of  Arbitration  up  to  the  first  of 
June,  1881,  be  elected  for  the  ensuing  year."  And  further,  to  meet  the 
views  presented  in  regard  to  that  Board  by  President  Vanderbilt,  it 
was  "  resolved,  that  when  a  decision  in  any  case  submitted  to  the 
Board  of  Arbitration  is  unanimous,  the  same  shall  be  final ;  but.  when 
not  unanimous,  the  question  shall  be  referred  to  the  Presidents,  with 
a  statement  of  the  differences  of  opinion  ;  and  the  Chairman  shall  call 
a  meeting  of  the  Presidents  as  early  as  practicable  thereafter  to  con- 
sider the  same." 

The  question  of  forming  a  Trunk  Line  pool  for  east-bound  business 
was  discussed.  President  Vanderbilt  stated  that  the  business  of  the 
Lake  Shore  and  New  York  Central  Roads,  of  both  of  which  com- 
panies he  was  President,  had  been  "  stolen  by  competing  lines."  He 
indicated  Chicago  as  the  central  point  in  connection  with  which  the 
"  robberies  "  of  his  business  had  been  committed  by  cut  rates  and 
violations  of  the  Trunk  Line  agreements.  The  President  of  the  Balti- 
more &  Ohio  Company  called  upon  Commissioner  Fink  for  the 
statistics  of  the  east-bound  business  from  Chicago.  It  was  then 
shown  that  the  Baltimore  &  Ohio  Co.  had  lost  nearly  one-half  of  the 
business  to  which  it  was  entitled  ;  that  the  Pennsylvania  and  Erie 
Cos.  had  gained  about  the  difference  lost  by  the  Balto.  &  Ohio  Co.,  and 
that  the  Lake  Shore  and  New  York  Central  Companies  were  largely 
short  of  their  agreed  percentage  of  the  Chicago  business.  President 
Garrett  then  asked  the  Commissioner  to  state  by  what  route  that 
traffic  had  been  diverted.  It  then  appeared  that  the  Mich.  Central 
and  Grand  Trunk  Roads  had  carried  the  freight  to  which  it  was 
claimed  the  Lake  Shore  was  entitled.  President  Garrett  then  called 
the  attention  of  the  meeting  to  the  fact,  quoting  only  the  same  harsh 
term  used  by  President  Vanderbilt,  that  the  "robber"  of  President 
Vanderbilt  of  the  Lake  Shore  and  N.  Y.  Central  Roads  was  President 
Vanderbilt  of  the  Mich.  Central  Road.  When  these  statistics  were 
produced,  President  Vanderbilt  expressed  entire  ignorance  and 
astonishment  at  the  development  of  this  fact.  The  Baltimore  &  Ohio 


Company,  through  its  honest  efforts  to  maintain  rates,  lost  a  large 
portion  of  its  business  at  Chicago. 

As  charges  had  been  previously  made  of  an  undue  increase  of  the 
grain  trade  of  Baltimore,  without  the  slightest  personal  unkindness, 
but  simply  in  order  to  present  facts,  President  Garrett  called  the 
attention  of  the  meeting  to  the  point  that,  in  the  summer  of  1879, 
President  Vanderbilt  had  permitted  another  Company  (the  Canada 
Southern,  of  which  he  is  President),  to  carry  grain  from  Toledo 
by  that  most  circuitous  route,  and  via  Harrisburg  and  the  Northern 
Central  Road  to  Baltimore,  at  four  cents  per  hundred  pounds,  making 
thereby  a  heavy  loss — the  actual  cost  of  transportation  being  much 
greater — and  thus  also  carrying  grain  to  the  port  of  Baltimore,  about 
the  growth  of  the  trade  of  which  President  Vanderbilt  had  so  frequently 
publicly  professed  his  anxiety  and  alarm.  President  Garrett  also 
called  the  attention  of  the  meeting  to  the  fact  that  when  time  contracts 
had  been  made,  contrary  to  the  agreements  of  the  Trunk  Lines,  the 
New  York  Central  Road  had  frequently  carried  an  immense  quantity 
of  grain  at  ten  cents  per  hundred  from  Chicago  to  New  York,  when,  in 
consequence  of  the  quantity  being  much  greater  than  could  be 
handled  by  the  New  York  Central  and  other  lines  that  had  made 
such  contracts,  the  Baltimore  &  Ohio  Co.  received,  upon  shipments 
so  large  as  to  occupy  its  entire  equipment,  twenty  cents  a  hundred 
from  Chicago  to  Baltimore. 

Notwithstanding  these  undisputed  statements  of  facts,  when  a  plan 
was  presented  at  that  meeting,  recommended  by  the  Trunk  Line 
Executive  Committee,  for  dividing  the  east-bound  traffic  of  the  five 
Trunk  Lines  (which  included  the  Grand  Trunk  of  Canada),  with  an 
amendment  to  the  plan  of  the  Committee  to  meet,  as  far  as  possible, 
the  views  of  the  New  York  Central  Co.,  for  a  contract  for  a  fixed 
period,  so  that  the  article,  as  amended,  would  be,  namely,  "  that  this 
agreement  be  enforced  for  three  years,  commencing  April  ist,  1881  ; 
but  if  any  changes  take  place  meanwhile  in  the  relations,  extensions, 
connections  or  conditions  of  the  parties  to  this  agreement,  which 
should  be  justly  considered  as  influencing  their  relative  amounts  of 


traffic,  then  the  parties  desiring-  a  change  may  call  for  a  readjustment 
upon  thirty  days'  notice  preceding  the  close  of  the  first  year,  and 
thereafter  upon  thirty  days'  notice  preceding  the  close  of  each  suc- 
ceeding year  during  the  existence  of  the  contract ;  and  if  not  had  or 
conceded,  the  question  shall  be  submitted  to  arbitration  within  thirty 
days  thereafter  ;  but  that  no  claim  be  considered  that  is  based  merely 
upon  the  amount  of  tonnage  forwarded  or  transferred  by  any  of  the 
roads  during  the  operation  hereof," — the  Baltimore  &  Ohio,  New 
York,  Lake  Erie  &  Western,  and  Penna.  Railroad  Cos.  voted  in  favor, 
and  the  New  York  Central  voted  against  the  amendment,  and  the 
motion  was  declared  lost,  as  unanimity  was  required. 

The  New  York  Central  offered  the  following:  "  That  the  percent- 
ages due  to  each  Company  be  determined  upon  the  quantity  of  like 
freight  carried  by  each  of  the  Trunk  Lines  during  the  calendar  year 
1880,  except  as  to  the  Grand  Trunk  Railway,  which  Company,  not 
having  had  its  own  connection  from  Chicago  east  during  the  whole  of 
that  year,  may  refer  to  the  Board  of  Arbitration  as  to  what  percentage 
it  shall  be  awarded  on  that  account ;  and  in  case  any  increased  per- 
centage is  allotted  to  said  Grand  Trunk  Railway,  the  Arbitrators  shall 
decide  how  much  shall  be  taken  from  any  of  the  Trunk  Lines  to 
make  the  same  good."  This  substitute  was  unanimously  adopted. 

The  New  York  Central  proposed  "  that  all  that  part  of  Article 
Twelve  following  the  words  'April  ist,  1881,'  be  stricken  out,  so  that 
Article  Twelve  would  read  '  that  this  agreement  be  in  force  for  three 
years,  commencing  April  ist,  1881.'"  The  Baltimore  &  Ohio,  Erie 
and  Pennsylvania  Cos.  voted  "  No,"  and  the  New  York  Central  voted 
"Aye."  The  amendment  was  declared  lost. 

President  Jewett  then  offered  the  following  amendment  to  Article 
Twelve  :  "  That  this  agreement  be  in  force  for  three  years,  commenc- 
ing April  ist,  1 88 1.  But,  provided  that  if  in  consequence  of  the 
building  of  new  lines;  or  forming  new  connections,  or  conditions,  the 
traffic  of  either  of  the  parties  hereto  is  thereby  increased  or  dimin- 
ished, the  subject-matter  of  a  proper  division  of  such  increase  or 
decrease  shall  be  1eft  for  future  adjustment  and  agreement ;  and  if  the 


parties  cannot  agree,  then  to  be  referred  to  the  Board  of  Arbitration  ; 
but  no  claim  shall  be  considered  that  is  based  merely  upon  the  amount 
of  tonnage  forwarded  or  transferred  by  any  of  the  roads  during  the 
operation  of  this  contract."  The  Baltimore  &  Ohio,  Erie  and 
Pennsylvania  R.  R.  Cos.  voted  in  favor  of  the  amendment.  The 
New  York  Central  voted  against  it.  The  amendment  was  declared 
lost. 

A  vote  was  then  taken  upon  the  report  of  the  Trunk  Line  Execu- 
tive Committee  as  a  whole,  including  the  foregoing  amendments. 
The  Baltimore  &  Ohio,  Erie  and  Pennsylvania  R.  R's  voted  "Aye." 
The  New  York  Central  voted  "  No."  The  motion  was  declared  lost. 
The  following  resolution  was  then  offered  :  "  Resolved,  Whereas, 
the  Presidents,  failing  to  adopt  the  report  of  the  Executive  Commit- 
tee, providing  for  the  pooling  of  east-bound  traffic  ;  and,  whereas, 
several  amendments  thereto  were  offered,  some  of  which  were  adopted 
and  some  rejected,  therefore,  upon  motion,  it  was  Resolved,  that  the 
said  report,  with  all  of  said  amendments,  be  referred  to  the  Board  of 
Arbitration,  with  the  request  that  they,  in  connection  with  the  Com  - 
missioner,  enquire  into  the  same  and  the  subject-matter  thereof,  and 
report  to  the  Presidents  a  plan  for  pooling  such  traffic,  with  such  other 
recommendations  touching  the  same  as  to  them  may  seem  just  and 
proper."  The  Baltimore  &  Ohio,  Erie  and  Pennsylvania  Rail  Roads 
voted  "Aye."  The  New  York  Central  voted  "  No."  The  Chairman 
declared  that  this  resolution  did  not  require  a  unanimous  vote,  as 
from  its  nature  there  was  nothing  contained  in  it  which  bound  the 
party  opposed  to  it. 

What  do  these  proceedings  show  ?  Clearly  that  the  New  York 
Central  &  Hudson  River  Railroad  Company,  alone  of  the  Trunk 
Lines,  refused  to  submit  any  differences  whatever  to  a  Board  of  Arbi- 
trators composed  of  Charles  Francis  Adams,  Jr.,  David  A.  Wells  and 
John  A.  Wright,  and  when  their  decision  was  only  to  be  regarded  as 
final  if  made  by  their  unanimous  vote. 

It  is  proper,  in  view  of  the  thoroughly  unsupported  attack  made 
on  the  Baltimore  &  Ohio  Company  by  President  Vanderbilt,  to  state 


that  during  the  protracted  meeting  of  the  i6th  and  lyth  of  June, 
notwithstanding  the  distinct  statements  made  by  the  President  of  the 
Baltimore  &  Ohio  Company  of  the  "methods"  and  action  of  the  New 
York  Central  Road,  not  a  single  charge  was  made  against  the  Balti- 
more &  Ohio  of  bad  faith,  or  failure  to  meet  the  requirements  of 
contracts.  On  the  contrary,  there  was  no  dissent  to  the  specific  state- 
ments of  the  thorough  integrity  of  action  of  the  Baltimore  &  Ohio 
Company  in  regard  to  all  the  subjects  presented,  at  these  meetings, 
for  the  consideration  of  the  Presidents  of  the  Trunk  Lines. 

Before  replying  particularly  to  the  statements  made  by  President 
Vanderbilt,  it  is  proper  to  say  that  President  Vanderbilt  himself  could 
not  have  been  surprised  at  the  general  comment  which  was  unques- 
tionably excited  upon  the  part  of  parties  well  informed  about  railroad 
management,  over  the  claim  that  the  New  York  Central  Company 
was  a  railroad  company  of  exceptional  virtue,  and  with  a  well-founded 
grievance.  It  is  admitted  that  President  Vanderbilt  of  the  New  York 
Central  &  Hudson  River  Railroad,  of  the  Harlem  Railroad,  of  the 
Lake  Shore  Railroad,  of  the  Michigan  Central  and  of  the  Canada 
Southern  Railroads,  wields  great  powers  for  good  or  evil.  But  do  his 
powers  for  evil  exceed  those  of  the  President  of  the  New  York,  Lake 
Erie  &  Western  Railroad  Company,  of  the  President  of  the  Pennsyl- 
vania Railroad  Company,  or  of  the  President  of  the  Baltimore  & 
Ohio  Railroad  Company  ?  If  governed  by  caprice,  by  prejudice,  by  a 
sense  of  irresponsible  power,  or  by  erroneous  theories,  the  managers 
of  either  of  the  great  trunk  lines  should  determine  to  break  down 
rates  one- half,  as  was  done  by  President  Vanderbilt,  will  that  officer 
say  that  the  power  for  evil  of  those  colleagues,  or  either  of  them,  is 
not  equal  to  his  ? 

The  history  of  this  meeting  of  the  Presidents  of  the  Trunk  Lines 
shows  that  there  was  predetermination  on  the  part  of  President  Yan- 
derbilt  to  accede  to  no  terms  except  those  dictated  by  his  supreme 
will,  and,  therefore,  the  record  which  has  been  traced  of  that  Trunk 
Line  meeting  places  the  responsibilities  for  the  evils  which  are  pros- 
trating many  of  his  western  and  other  western  connections  upon 


President  Vanderbilt ;  and  if  results  show  that  the  profits  of  the  Michi- 
gan Central  and  the  Canada  Southern  should  not  make  satisfactory  divi- 
dends ;  if  the  net  earnings  of  the  Lake  Shore  should  be  unsatisfactorily 
reduced,  can  the  verdict  of  those  who  may  be  dissatisfied  with  these 
results,  and  who  are  interested  in  those  roads,  be  other  than  that 
they  are  the  necessary  fruits  which  have  followed  the  policy  so  dis- 
tinctly adopted  by  President  Vanderbilt,  a  policy  that  he  alone  shall 
dictate  and  govern  ;  that  his  Company  must  be  the  supreme  and  final 
arbiter  of  subjects  that  affect  not  merely  the  Trunk  Lines  of  railway, 
but  the  interests  of  cities,  of  States,  and  of  the  whole  country. 

In  order  to  do  no  injustice  to  President  Vanderbilt,  and  to  meet 
distinctly  each  point  presented  by  him  against  the  Baltimore  & 
Ohio  Company,  he  is  quoted  as  follows : 

"  Before  we  are  through  there  will  be  a  great  many  things  to  be 
settled.  Take  the  Baltimore  &  Ohio,  for  instance,  which  was  allowed 
eight  per  cent,  of  the  New  York  business.  That  road  cut  on  every 
hundred  pounds  of  freight  it  carried,  in  order  to  get  even  that  eight 
per  cent,  of  the  business.  What  right  has  the  Baltimore  &  Ohio  to 
any  New  York  business  at  all  ?  It  is  not  a  New  York  road,  and  is 
not  entitled  to  any  of  the  business.  The  roads  to  Baltimore  and  to 
Philadelphia  have  built  up  those  ports  at  the  expense  of  this  city.  It 
is  about  time  that  an  end  was  put  to  it.  They  have  been  allowed  dif- 
ferential rates  to  those  cities.  If  they  can  cut  rates  to  New  York  they 
have  no  need  of  the  differentials.  I  do  not  say  these  will  be  abolished  ; 
I  do  not  know ;  and  I  have  no  propositions  to  make  to  anybody. 
But  a  good  many  serious  questions  have  got  to  be  settled,  and  I  guess 
the  present  is  just  as  good  a  time  as  any." 

President  Vanderbilt  says :  "  Take  the  Baltimore  &  Ohio,  for 
instance,  which  was  allowed  8$  of  the  New  York  business.  That 
road  cut  on  every  hundred  pounds  of  freight  it  carried  in  order  to 
get  even  that  Sfc  of  the  business."  At  the  Presidents'  meeting,  when 
President  Garrett  called  attention  to  the  waste,  by  the  large  rebates 
being  paid  by  competing  lines  on  New  York  business,  he  also  called 
attention  to  the  striking  fact  that  the  Baltimore  &  Ohio  Company  had 


10 


not  paid  rebates  on  a  single  pound  of  freight  during  this  protracted 
period  of  heavy  cutting,  but  that  it  got  more  than  its  8%c/c — the  agreed 
portion — at  pool  rates,  thus  proving  that  the  Baltimore  &  Ohio  was  a 
much  more  advantageous  line  for  many  points,  and  was  entitled,  as  it 
always  believed,  to  a  much  greater  percentage  than  it  had  received, 
provided  it  would  offer  the  same  reductions  that  its  competitors  were 
known  to  give. 

The  Gen'l  Freight  Agent  of  the  Baltimore  &  Ohio  Company 
addressed  President  Vanderbilt,  on  August  roth,  a  communication  in 
which  he  said  on  this  point : 

"At  the  Presidents'  meeting,  which  was  held  on  the  i6th  of  June, 
I  was  asked  by  President  Garrett,  in  your  presence,  if  the  Baltimore  & 
Ohio  Railroad  Co.  was  not  maintaining  rates  on  west-bound  traffic 
from  New  York.  I  replied  that  the  Baltimore  &  Ohio  Railroad  had 
maintained  rates  upon  west-bound  traffic  from  New  York  since 
December,  1878.  When  I  made  the  statement  to  yourself  and 
President  Garrett  that  the  Baltimore  &  Ohio  Railroad  had  maintained 
rates  from  New  York  since  December,  1878,  I  stated  what  I  knew, 
and  can  prove,  to  be  true.  I  do  most  earnestly  protest  against  being 
classed,  by  you,  with  the  professional  liars  who  have  so  long  disgraced 
the  traffic  transactions  of  the  country." 

Thus,  instead  of  the  Baltimore  &  Ohio  Road  "cutting  on  every 
one  hundred  pounds,  in  order  to  get  even  that  eight  per  cent,  of  the 
business,"  it  is  shown  that,  hampered  and  restricted  as  it  has  been,  with 
other  companies  paying  large  rebates,  the  merchants  of  New  York, 
and  the  merchants  of  the  South  and  Southwest  and  the  West,  find 
it  their  interest  to  use  this  route  for  the  benefit  of  their  trade 
and  of  the  commerce  of  New  York  and  the  commerce  of  the 
country.  The  managers  of  the  Baltimore  &  OhioCompany  believe, 
that  if  the  direct  and  valuable  facilities  of  the  Baltimore  &  Ohio 
Road  (more  direct  and  more  valuable,  in  many  cases,  for  the  regions 
it  penetrates  than  any  other  line)  could  be  fairly  and  properly  used  by 
the  merchants  of  New  York,  instead  of  eight  and  one-half  per  cent., 
twenty-five  per  cent,  of  the  business  of  New  York  would  be  com- 


11 


manded  by  that  route.  What  follows?  President  Vanderbilt  says : 
"  What  right  has  the  Baltimore  &  Ohio  to  any  New  York  business 
at  all  ?.  It  is  not  a  New  York  road,  and  is  not  entitled  to  any  of  the 
business.  The  roads  to  Baltimore  and  to  Philadelphia  have  built  up 
those  ports  at  the  expense  of  this  city.  It  is  about  time  that  an  end 
was  put  to  it."  What  right  to  any  New  York  business  !  Not  a  New 
York  road  !  On  the  same  theory,  what  right  has  the  New  York  Cen- 
tral Road  to  any  Boston  business  ?  The  New  York  Central  in  the 
same  sense  is  not  a  Boston  Road.  The  Baltimore  &  Ohio  Road  at 
present  terminates  at  Baltimore,  185  miles  from  New  York,  and  uses 
direct  connecting  roads  between  Baltimore  and  New  York.  The  New 
York  Central  &  Hudson  River  Road  terminates  at  the  Hudson 
river,  and  it  uses  the  Boston  &  Albany  Road  for  201  miles  to  reach 
Boston. 

Can  it  be  explained  why  the  New  York  Central  Road  is  entitled  to 
do  Boston  business  and  the  Baltimore  &  Ohio  Road  has  no 'right 
to  do  New  York  business  ?  Further,  whilst  the  Baltimore  &  Ohio 
Road  reaches  directly  through  its  own  lines,  many  points,  great  en- 
trepots and  centers  of  trade  in  the  West,  which  the  New  York  Central 
does  not  reach  by  its  own  lines,  shall  any  one  question  the  right  of 
the  New  York  Central  Road  to  do  business  at  Pittsburgh  or 
Columbus,  at  Cincinnati  or  Louisville  or  St.  Louis,  or  any  of 
the  numerous  points  which  the  New  York  Central  Road  does 
not  even  profess  to  reach  by  New  York  Central  lines  ?  "  But 
the  roads  to  Baltimore  and  to  Philadelphia,"  says  President 
Vanderbilt,  "have  built  up  those  ports  at  the  expense  of  this  city." 
How  true  is  this  statement !  Look  at  the  marvelous  opulence  and 
progress  of  the  metropolis  of  the  new  world,  New  York !  But 
is  it  to  be  the  only  city  in  the  United  States  that  is  to  prosper  and 
progress  ?  Are  the  States  and  cities  of  the  South  and  the  South- 
west and  the  West  to  depend  upon  one  city — the  great  city  of 
Manhattan  Island  ?  Alas  !  for  the  prosperity  of  New  York,  if  such 
views  as  those  presented  by  President  Vanderbilt  were  to  govern  the 
sagacious  merchants  and  citizens  of  that  metropolis. 


12 


Baltimore  has  grown  and  Philadelphia  has  grown.  The  Baltimore 
&  Ohio  Road,  from  its  origin  in  1828  to  this  hour,  has  given  to  Bal- 
timore a  loyal  and  faithful  support  in  doing  what  is  judicious  and 
best  for  the  regions  penetrated  by  its  constantly  expanding  lines,  thus 
alike  serving  that  city  and  those  territories.  And  that  road  and  the 
city  of  Baltimore,  without  jealousy  and  without  envy,  have  likewise 
aided  the  growth  of  New  York  ;  and  reciprocally,  all  our  great  cities 
in  our  vast,  prosperous  and  growing  country  will  be  needed  as 
entrepots  of  commerce,  and  each  will  thus  continue  to  prosper. 

"  It  is  about  time,"  President  Vanderbilt  pronounces,  "  that  an  end 
was  put  to  it."  An  end  to  what  ?  "  To  building  up  Baltimore  and 
Philadelphia  at  the  expense  of  this  city."  At  no  distant  period, 
President  Vanderbilt  will  learn  that  honorable  and  open  and  wise 
competition  between  railways  will  build  up  New  York  and  Phila- 
delphia and  Baltimore,  and  other  cities  and  centres  of  business,  and 
build  up  and  advance  the  interests  and  prosperity  of  our  common 
country. 

He  adds :  "  Those  cities  have  been  allowed  differential  rates," 
probably  meaning  also  that  "  it  is  about  time  that  an  end  was  put  to  " 
these  differential  rates.  Even  at  the  command  of  the  mightiest, 
water  will  not  run  up  hill.  The  laws  of  trade  enforce  their  power. 
Geography  will  not  vary  its  distances  to  meet  the  command  of  even 
the  most  powerful.  Does  President  Vanderbilt  mean  that  the  con- 
sumer, the  producer  and  the  merchant  of  Cincinnati,  and  of  the  region 
which  it  represents,  shall  pay  for  the  transportation  of  its  imports  and 
exports  for  578  miles  from  Cincinnati  to  Baltimore  as  much  as  from 
Cincinnati  to  New  York  by  the  N.  Y.  Central  Road  for  867  miles  ; 
and  does  he  mean  that  the  whole  South  and  Southwest,  the  West  and 
the  Northwest,  shall  be  required  to  ignore  distances  of  hundreds  of  miles 
in  their  favor,  by  lines  that  can  be  worked  as  cheaply  per  ton  per 
mile  as  the  N.  Y.  Central  road,  to  accommodate  the  wild  and  reck- 
less demands  of  those  who  have  not  properly  considered  the  princi- 
ples and  the  interests  involved  ?  It  is  not  the  Baltimore  &  Ohio, 
or  the  Pennsylvania,  or  the  New  York,  Lake  Erie  &  Western,  or 


13 


the  New  York  Central  R.  R.  Co.,  but  it  is  the  interests  of  the  vast 
populations  connected  with  these  lines,  and  the  sources  of  the  com- 
merce of  the  country,  that  are  entitled  to  and  will  have  the  cost  of 
transportation  adjusted  in  proper  relation  to  distance.  Ii"  this  cannot 
be  attained,  because  of  unwise  management  of  those  who  represent 
the  stockholders  in  these  organizations  with  such  vast  capital,  then 
the  people  in  their  majesty  will  determine  that  they  will  exercise  their 
power  to  overcome  the  follies  of  railway  managers  who  attempt  to 
throw  aside  the  laws  that  should  govern  in  fixing  the  charge  for 
transportation  in  proper  relation  to  distance,  and  thus  maintain  the 
rights  of  great  territories,  and  of  the  50  millions  of  people  whose 
interests  are  involved. 

The  Baltimore  &  Ohio  has  the  advantages  of  distance  to  Baltimore 
as  compared  with  the  New  York  Central  to  New  York,  namely : 

MILES. 

From  Chicago  ......  140 

From  St.  Louis          ......  249 

From  Louisville 289 

From  Cincinnati         ......  289 

And  from  all  points  South  of  Baltimore,    viz : 

the  distance  from  Baltimore  to  New  York     .  185 

It  also  has  proven,  for  a  series  of  years,  that  its  expenses  of 
operating  show  it  to  be  the  cheapest  road  of  the  Trunk  Lines,  and  to 
quote  from  evidence  given  before  the  Special  Assembly  Committee 
on  Railroads  of  New  York  in  1879  on  behalf  of  the  New  York 
Trunk  Lines  :  <(  It  is  the  cheapest  road  of  the  Trunk  Lines  to  operate, 
from  the  fact  that  it  runs  a  great  portion  of  its  distance  through  most 
valuable  coal  fields.  Whilst  the  New  York  Central  is  paying  three 
or  four  or  five  dollars  a  ton  for  its  coal,  the  Baltimore  &  Ohio  can 
bring  it  right  out  of  the  pit  and  dump  it  into  the  car  of  the  engine  at 
a  cost  possibly  of  80  to  90  cents  a  ton.  The  advantage  it  has  in  point 
of  fuel  far  overbalances  any  advantage  the  New  York  Central  may 
have  in  grades." 

The  entire  statements  and  arguments  of  President  Vanderbilt  and 
President  Jewett  and  the  officers  of  the  N.  Y.  Central  and  N.  Y.,  L. 


14 


E.  &  W.  Roads  before  the  Special  Assembly  Committee  on  Railroads 
of  the  State  of  New  York,  conclusively  show  the  thorough  absurdity 
and  wrong  of  attempting  to  ignore  the  important  differences  of  dis- 
tance in  favor  of  Baltimore-  and  Philadelphia  in  fixing  the  rates  for 
transportation  to  the  respective  cities,  without  regard  to  those  important 
and  controlling  differences  of  distance  and  consequent  costs  of  trans- 
portation. 

Perhaps  President  Vanderbilt  may  not  be  prepared  to  accept  the  plain 
truths  which  have  been  stated,  and  therefore  it  is  proper  to  refresh 
his  recollection,  and  to  call  the  attention  of  all  who  are  interested,  to 
his  statement  upon  this  subject  of  differential  rates  to  cities.  Presi- 
dent Vanderbilt  is  quoted  from  his  undoubtedly  well  considered  and 
deliberate  letter  to  the  Chamber  of  Commerce  of  New  York  of 
April  1 8th,  1878,  namely:— 

"  GRAND  CENTRAL  DEPOT,  NEW  YORK,  April  18,  1878. 
George  Wilson,  Esq.,  Secretary  Chamber  of  Commerce. 

DEAR  SIR  : — I  am  in  receipt  of  the  resolution  of  the  Chamber  of 
Commerce  adopted  on  the  4th  of  April.  There  is  a  grave  error  in 
the  assumed  facts  upon  which  the  resolutions  are  based. 

The  New  York  Central  &  Hudson  River  Railroad  Co.  has  not 
entered  into  any  combination  to  discriminate  against  New  York  or  its 
merchants  in  freight  charges  in  favor  of  any  other  port.  On  the  con- 
trary this  Company  has  endeavored  for  years  past  to  do  away  with 
the  differences  which  have  heretofore  existed,  and  in  concert  with  the 
Erie  Railway  succeeded  after  a  long  and  desperate  struggle  in  abol- 
ishing about  a  year  ago  these  discriminations.  This  result  placed  the 
New  York  shipper  upon  an  equal  footing,  and  gave  to  him  the  same 
advantages  as  were  enjoyed  by  the  merchants  of  any  rival  city. 
Certainly  no  more  could  be  reasonably  asked.  To  require  the  New 
York  roads  to  carry  freight  to  and  from  the  West,  at  a  rate  which 
would  disregard  the  excess  of  cost  of  transportation  from  Philadel- 
phia and  Baltimore  to  and  from  foreign  ports,  would  give  to  New 
York  merchants  such  advantages  as  would  destroy  the  commerce  of 
those  cities.  Their  roads  could  not  submit  to  this;  nor  would  those 
cities  permit  them  to,  until  they. had  been  exhausted  in  the  struggle 
to  maintain  a  fair  equilibrium.  The  New  York  roads  have  put  this 
city  on  an  equality  with  the  most  favored  rival.  To  this  position 


15 


they  are  thoroughly  committed,  and  they  will  stand  by  it  under  all 
circumstances  ;  the  rest  remains  with  its  merchants.  So  long  as  their 
opportunities  are  as  favorable  as  those  of  any  other  port,  they  can 
compete  successfully  with  all  comers.  They  do  not  need,  nor  ought 
they  to  ask,  their  rival  roads  to  precipitate  war  of  extermination  on 
behalf  of  a  principle  which  is  opposed  to  all  established  rules  of 
trade.  Such  a  contest  would  permanently  injure  the  roads,  derange 
all  business  during  its  continuance,  and  result  in  no  good  in  the  end. 
Respectfully  yours, 

WM.  H.  VANDERBILT,  President." 

Desiring  to  do  the  fullest  justice  to  President  Vanderbilt,  and  as  a 
matter  of  logical  inference,  it  is  impossible  that  mere  want  of  know- 
ledge, mere  ignorance  of  the  rights,  principles,  and  duties  involved  in 
these  great  questions,  could  possibly  govern  him  in  representing  the 
great  interests  which  have  appointed  him  their  presiding  officer.  The 
only  grave  reason  for  this  protracted  irregularity  in  railway  manage- 
ment is  of  another  and  more  serious  character.  President  Vanderbilt 
gives  as  a  specific  reason  for  his  course,  whilst  really  there  has 
been,  as  he  accurately  states,  "  no  war  of  rates ;  that  he  knows  of 
no  war,  and  that  he  is  fighting  nobody ;"— that  he  wishes  to  make 
railway  property  so  unprofitable  that  the  building  of  lines  parallel  to 
his  will  be  stopped  through  the  inability  of  parties  connected  with 
them  to  raise  the  money  for  their  construction.  Very  clearly  did 
the  Presidents  of  the  Trunk  Lines  see,  at  the  meeting,  the  proceed- 
ings of  which  have  been  presented,  that  President  Vanderbilt  is 
seriously  alarmed  at  some  very  important  changes  that  are  taking 
place  in  the  railway  interests  and  connections  of  the  country.  He 
is  gravely  alarmed  to  find  that  New  England,  which  was  formerly 
subject  to  his  control,  in  rates,  through  the  connections  of  the 
New  York  Central  Road,  is  being  opened  for  the  competition  of  the 
Pennsylvania  and  the  N.  Y.,  L.  E.  &  W.  and  the  Baltimore  &  Ohio 
Roads.  He  sees  too,  that  his  imperial  sway  over  the  cities  and  the 
regions  upon  his  lines  through  the  State  of  New  York  is  about  being 
affected  by  the  construction  of  rival  lines.  But  is  President  Vanderbilt 
philosophical ;  is  he  wise,  and  does  he  display  such  foresight  as  should 


16 

distinguish  a  manager  of  such  extended  interests,  in  adopting  this 
obstructive  policy^ this  policy  designed  to  be  destructive  of  railway 
interests,  in  order  to  prevent  that  competition  which  capital  and  the 
interests  connected  with  vast  populations  have  decided  to  establish  ? 
He  may  break  down  the  weaker  roads  of  his  own  system  ;  he  may  injure 
the  earnings  of  some  of  the  great  properties  entrusted  to  his  manage- 
ment in  such  a  manner  as  to  stop  their  dividends,  but  his  own  statement 
shows  that  there  is  no  reason  that  parallel  lines  to  the  N.  Y.  Central 
should  not  be  built,  for  he  says  the  N.  Y.  Central  Road  <(  is  perfectly 
'  satisfied"  with  things  as  they  are.  "We  are  doing  a  great  deal  of  work 
and  we  are  getting  our  money."  "The  Central  can  hold  its  own  in  both 
freight  and  passenger  business  for  a  little  while  any  way.  I  am  perfectly 
satisfied,  and  when  people  get  tired  of  this  thing  they  can  come  to  me. 
I  have  no  propositions  to  offer."  What  is  the  effect  of  this  statement  ? 
It  means,  though  other  lines  may  fail  to  make  money,  that  even  at  low 
prices,  such  are  the  vast  aggregates  of  local  and  other  trade  at  the  com- 
mand of  the  N.  Y.  Central,  that  line  will  be  prosperous  amid  the 
disasters  of  other  companies.  Thus  he  practically  endorses  the  wis- 
dom and  foresight  of  the  capitalists  who  have  determined  to  build  a 
parallel  line  from  New  York  to  Buffalo  and  the  West.  Surely  Presi- 
dent Vanderbilt  has  not  so  deluded  himselfas  to  believe  that  his  efforts  to 
prevent  the  construction  of  a  rival  line  to  the  N.  Y.  Central  road  are  in 
the  interests  of  the  people  of  the  State  of  New  York  or  the  merchants 
of  New  York  City.  What  New  York  wants  is  a  line  parallel  to  the  New 
York  Central ;  what  the  country  wants  is  a  parallel  road  to  the  Neic 
York  Central.  If  any  line  has  grown  through  the  power  it  possesses 
by  its  passing  through  a  series  of  great  cities  from  New  York  to  the 
North,  and  from  Albany  to  Buffalo ;  if  any  line  has  gained  sue 
strength  that  it  can  step  forward  and  through  its,_  President  say, 
I  will  strike  the  rights  of  the  railway  interests  and  of  the  people 
of  this  country  by  reducing  the  rates  of  transportation  to  such 
unprofitable  figures  that  rival  lines  will  be  prevented  from  being  built, 
then  it  has  reached  a  position  when  the  whole  interests  of  the  country 
will  be  benefited,  and  all  will  t>e  gratified  to  see  a  parallel  line  which 


17 


will  divide  that  vast  business,  and  bring  the  N.  Y.  Central  road  within 
the  ordinary  conditions  of  railways  that  should  serve  the  country 
at  moderate  and  reasonable  prices,  and  prevent  it  from  exercising 
such  power  as  can  destroy  the  railway  rates  of  the  country,  thus  affect- 
ing properties  which  should  have  regular,  reasonable  and  properly 
remunerative  rates,  alike  for  the  interests  of  the  producer,  the  con- 
sumer, and  the  proprietors  of  the  properties.  When  this  policy  was 
presented  to  President  Garrett,  he  objected  to  it  as  unwise  and  disas- 
trous, and  as  calculated  not  only  to  lead  to  temporary  but  to  great 
permanent  evils.  It  would  arouse  the  whole  country  to  feel  that  com- 
petition must  be  encouraged  so  as  to  prevent  the  abuse,  by  a  few  con- 
trolling parties,  of  interests  too  immense  to  be  needlessly  and  injudi- 
ciously jeopardized.  President  Vanderbilt's  colleagues,  representing 
other  Trunk  Lines,  perfectly  understand  his  embarrassment,  his  anxie- 
ties and  his  difficulties ;  but  certainly  they  cannot  sympathize  or  co- 
operate with  him  in  his  extraordinary  and  destructive  modes  or 
relief. 

Does  President  Vanderbilt's  action  even  temporarily  benefit  the  trade 
of  New  York  ?  Heretofore,  the  so-styled  wars  of  rates  have  always 
proved  injurious  to  the  commerce  of  New  York.  When  the  Penna. 
and  Baltimore  &  Ohio  roads  have  been  required  to  take  very  low 
rates  for  the  transportation  of  grain,  the  result  has  been,  with  singular 
uniformity,  that  the  business  of  the  New  York  &  Erie  Canal  has 
been  seriously  diminished,  and  that  "transfers  of  enormous  shipments 
of  grain  to  Baltimore  and  Philadelphia  have  taken  place,  so  that  the 
aggregate  receipts  of  New  York  have  been  thus  seriously  damaged, 
and  great  gains  have  been  made  by  the  ports  of  Baltimore  and  Phila- 
delphia. It  will  be  well  for  those  interested  to  examine,  in  these  "  wars 
of  rates,"  whether  the  New  York  canals,  and  the  trade  of  New  York, 
have  been  benefited  by  the  policy  of  President  Vanderbilt,  under  con- 
sideration. 

The  injudiciousness  of  this  breaking  down  of  rates  to  an  unremun- 
erative  standard  is  shown,  very  distinctly,  by  the  statistics  in  regard  to 
the  tonnage  and  revenue  from  through  traffic  over  the  four  Trunk 


18 


Lines  during  the    months  of  July  and  August,  compared  with  the 
corresponding  months  of  last  year,  namely  : — 


July   1880 — Tonnage 
"       1881 


August  1 88 1 
1880 


July   1880 — Revenue 
"       1881 


August  1880- 
1881 


Decrease 


Increase 


Decrease 


Decrease 


1,041432 
972,297 

69,135 

966,253 
963,707 

2,546 


$2,958,300 
1,908,075 


$1,050,225 


$2,709,976 
1,668,606 


Revenue  lost  in  two  months   . 

This  decrease  is  actually  of  net  earn- 
ings, and  at  the  same  rate  would  be 
for  one  year  ..... 


$1,041,370 
$2,091,595 

$12,549,570 


The  Baltimore  &  Ohio  Company  has  bettered  and  strengthened  its 
lines  by  double  and  triple  tracks,  with  steel  rails  and  by  increased 
plant  and  improved  connections,  and  is  constantly  augmenting  its  useful- 
ness and  service  to  the  regions  with  which  it  is  connected.  It  passes 
through  territories  full  of  mineral,  manufacturing,  agricultural  and 
commercial  resources,  so  that,  even  in  this  period  of  needlessly  and 
recklessly  low  through  rates,  it  maintains  and  increases  its  traffic.  It 
is  also  adding  to  its  equipment,  and  effecting  satisfactory  results.  Its 
great  plant  is  not  only  occupied,  but  it  is  literally  without  an  idle 
wheel  upon  all  its  extended  lines.  With  cities  and  territories  allied  to 
it  since  its  foundation  and  during  its  progress,  and  identified  with 
interests  which,  in  times  of  difficulty,  loaned  their  credit  and  resources 
in  aid  of  its  construction,  it  is  not  to  be  supposed  that  it  will  surrender 
their  rights.  Surely  President  Vanderbilt  is  mistaken  if  he  includes, 
as  he  apparently  did,  the  Baltimore  &  Ohio  Co.  when  he  said, 


19 


u  When  people  get  tired  of  this  thing  they  can  come  to  me  :  I  have 
no  proposition  to  offer."  The  Baltimore  &  Ohio  Co.  has  common 
sense,  justice,  experience,  and  the  interests  of  the  peoples  whom  it 
represents,  as  the  basis  of  its  policy.  It  has  also  the  interests  of  its  share- 
holders to  protect.  President  Vanderbilt  will  find  that  he  must  yield,  not 
to  the  Presidents  of  the  Trunk  Lines,  but  to  principles  of  common  sense 
and  common  justice,  and  thus  aid  in  restoring  the  reasonable  pros- 
perity of  the  railways  of  the  country  connected  with  through  business, 
especially  of  the  West,  and  cease  to  think  that  assertions  about  the 
interests  of  New  York,  based  upon  empty  delusions,  will  control  in- 
terests of  such  magnitude  and  importance  as  those  embraced  by  the 
Trunk  Lines  of  the  United  States  and  their  connections. 

President  Garrett  trusts  that  the  demonstration  is  perfect,  that  it  is 
injudicious  to  attempt  to  prevent  other  railways  from  being  built, 
either  parallel  to  or  competing  with  the  New  York  Central  system,  by 
reducing  the  rates  for  through  transportation  to  unremunerative 
standards ;  that  it  is  clearly  against  the  interests  of  the  city  and  State 
of  New  York  and  of  the  country  to  resort  to  such  illegitimate  means 
for  the  purpose  of  preventing  increased  accommodations  to  the  im- 
mense populations  and  sections  of  country  bordering  upon  the  N.  Y. 
Central  lines  ;  that  if  the  policy  were  reasonable,  or  just,  or  patriotic,  it 
must  necessarily  fail,  because  it  is  against  the  interests  of  New  York 
to  maintain  a  monopoly  of  transportation  through  regions  where  such 
immense  and  increasing  traffic  must  be  provided  for,  and  when  it  is 
impossible  that  the  growing  populations  and  commerce  of  the  country, 
and  particularly  of  New  England  and  of  the  city  and  State  of  New 
York,  can  fail  to  imperatively  require  the  increase  of  competition 
and  of  accommodation. 

As  has  been  repeatedly  demonstrated,  the  Baltimore  &  Ohio  and 
the  Pennsylvania  R.  R.  Cos.,  in  connection  with  their  respective  ter- 
mini, can  fully  take  care  of  their  sections  and  of  their  interests  ;  and 
as  New  York  itself  is  deeply  allied  with  the  transportation  of  traffic 
by  these  powerful  organizations,  the  unsound  position  taken  by  Pres- 
ident Vanderbilt  in  saying  "What  need  is  there  of  a  conference  ? 


There  is  nothing  to  confer  about.  The  war  in  rates  !  I  know  of  no 
war.  I  am  fighting  nobody!" — is  apparent.  He  has  shown  that  a  rail- 
way manager,  of  his  great  wealth  and  power,  is  a  dangerous  factor  in 
damaging,  needlessly,  leading  interests  and  industries  of  the  country, 
and  that,  too,  when  he  knows  he  can  agree  to  and  re-establish  proper 
rates  ;  or,  if  he  cannot  agree,  that  with  the  organization  already 
effected,  he  can  refer  any  difficulties  of  rates,  or  the  distribution  of 
business,  to  arbitrators  of  skill,  experience  and  honor,  and  thus  arrange 
at  once  to  join  the  other  railroad  managers  of  the  country,  in  acting 
upon  principles  of  fairness,  justice  and  good  sense,  in  connection  with 
all  the  great  interests  affected,  by  the  establishment  of  judicious  and 
suitable  railway  tariffs,  and  thus  withdraw  from  his  isolated  position, 
which  he  must  now  surely  perceive  can  be  fruitful  of  no  good,  but 
only  of  harm. 


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